Nov. 6 (Bloomberg) -- Cooper Tire & Rubber Co. could have
quickly closed an agreement with the United Steelworkers union
and expedited a planned $2.5 billion buyout by Apollo Tyres Ltd.
if it had been allowed to take part in union negotiations, a
lawyer testified today at trial.

Instead, Apollo delayed the USW talks and insisted
officials of Findlay, Ohio-based Cooper be excluded, Stanley
Weiner, a partner at the Jones Day LP law firm who represented
the U.S.’s fourth-largest tire maker in the deal, told Delaware
Chancery Court Judge Sam Glasscock III at a trial in Wilmington.

If Cooper executives had been included in Apollo’s union
talks, they could have helped “get it done” on an agreement
within a week, Weiner said. Instead, Apollo’s attitude was
“there’s no place for Cooper” as part of the labor talks, he
added.

Glasscock is being asked to decide whether labor troubles
with the United Steelworkers union and a Chinese joint venture
created significant-enough problems to change the value of the
company and allow Apollo to pull out of the deal. The Gurgaon,
India-based tire maker demanded a $2.50-a-share price cut to
close the deal. Apollo originally agreed to pay $35 a share.

Price Cut

Cooper officials contend Apollo executives, including Vice
Chairman Neeraj Kanwar, suffered buyer’s remorse after agreeing
to acquire Cooper and are using the labor problems as a pretext
to torpedo the deal. They added that Apollo officials dragged
their feet in negotiating with the union in hopes that the deal
would collapse.

Kanwar, who took the witness stand today, said his goal was
still “to get the deal done.” To make that happen, Apollo
needs the $2.50-a-share price cut to cover the costs of
concessions demanded by the steelworkers in exchange for
blessing the buyout.

“The $32.50 price is what I need” to pay for as much as
$125 million in concessions demanded by the U.S. labor union,
the executive told Glasscock.

Cooper’s sometimes-contentious relationship with the
steelworkers’ union was the reason Apollo officials decided to
keep them out of the labor talks, Kanwar said. The Indian
company was seeking to build a relationship with the union and
didn’t want it to start “on a bad note” by involving the
Cooper officials in the talks, he added.

Kanwar, whose family owns more than 40 percent of Apollo’s
shares, said he was shocked to learn Cooper had lost control of
its Chinese joint venture and had no access to its financial
data. Its Chinese partners opposed Cooper’s decision to sell to
Apollo, so they stopped making Cooper-brand tires and barred
Cooper executives from the facility.

‘No Access’

“I never realized what I was getting into,” Kanwar said.
“Here’s a $4.2 billion company with no access to its largest
joint-venture company in the world.”

Cooper Chief Executive Officer Roy Armes said yesterday he
had warned Kanwar and other Apollo officials the tire maker’s
Chinese partners and the U.S. union may oppose the buyout during
negotiations. He also conceded it was “a big problem” that
Cooper is being denied access to the Chinese joint-venture’s
financial records and that may make filing the parent company’s
third-quarter financial results difficult.

Armes also said yesterday he was “offended” that Kanwar
and other Apollo executives wanted to alter the original deal to
help solve labor problems they knew about when agreeing to the
$2.5 billion buyout.

Glasscock said today one of the issues in the case will be
whether the price-reduction request was reasonable. He’ll also
have to decide if Apollo was using the labor problems as a
pretext to scuttle the deal.